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I have been disappointed to find that the tax calculations on invoices with multiple line items are incorrect due to line item rounding, making our invoices invalid. At a minimum, Xero's tax calculations should always be accurate.

Currently, Xero calculates the tax on each line item, rounded to 2 decimal places, then sums the tax at the bottom by tax component. If an invoice has multiple line items, this rounding approach results in incorrect total tax amounts.

The best solution is fairly straightforward. Sum the line item values by tax component first, then apply the appropriate tax rate for an accurate tax calculation.

An alternate solution - if Xero must calculate the tax for each line item first, then round the line item tax to at least 4 decimal places, then sum the line taxes by category, rounded to 2 decimal places. The user should at least have the option of setting tax calculation rounding to 4 decimal places for accuracy.

Accuracy, especially with customer invoices, should be a top priority for Xero.